Indian banks sound alarm over AI-driven scams
What's the story
As artificial intelligence (AI) increasingly transforms the financial industry, Indian banks are grappling with a surge in fraud-related issues. A recent survey by BioCatch revealed that 84% of banking leaders in India have witnessed an increase in fraud losses over the past year. The survey covered 1,440 leaders from across 25 countries and found India to be one of the most affected markets by financial fraud and AI-enabled threats.
Vulnerability perception
Surge in fraud attempts
The survey found that 84% of respondents see AI agents as the biggest exploitable vulnerability in finance over the next year. Among 100 banking and financial crime prevention leaders surveyed in India, a whopping 90% said fraud attempts at their institutions have surged over the past year. This is well above the global average of 81%. The figure has also jumped from India's previous year's survey where only 70% reported an increase in fraud attempts.
Fraud sophistication
AI's role in financial fraud
The survey also highlighted growing concerns over AI's role in financial fraud. A staggering 93% of Indian respondents believe that AI has made fraud and scam schemes more sophisticated. Further, 90% said distinguishing between legitimate and malicious or manipulated activity assisted by AI will be extremely difficult in the future. This highlights the potential challenges posed by advanced technologies like artificial intelligence (AI) in detecting and preventing fraudulent activities.
Fraud acceleration
Speed of fraudulent activity
Indian banking leaders are also globally among the most worried about the speed of fraudulent activity. Around 95% of respondents said they are very concerned about the increasing speed of fraud, against a global average of 76%. The survey also revealed that fraud has a major financial impact on institutions, with nearly half (48%) of Indian respondents saying their institutions lose over $10 million to fraud every year.
Payment fraud
Instant payment platforms major source of fraud
The survey also identified instant payment platforms as a major source of fraud. Nearly 66% of Indian banking leaders flagged scam attempts via instant payment systems as the biggest contributor to rising fraud, higher than the global average of 59%. The report warned that India's rapid adoption of UPI could be opening up new avenues for fraudsters.